Anglo Irish Bank has become embroiled in yet another New York property deal lawsuit after a group of equity investors in an investment vehicle it created filed an injunction to stop the bank from taking full control of two hotels bought by the fund in 2006.

The general partner, experienced hotel sector operator Timothy Haskin, filed the suit in early July after the bank gave legal notice to remove him after the two sides failed to resolve a disagreement over renovation costs for the Beekman and Eastgate hotels, landmark properties acquired on behalf of a group of Anglo private clients by its Peninsula Real Estate fund vehicle.

Haskin and 24 investors claim in their papers that Anglo was frustrating the completion of work on the properties by withholding funds and failing to approve final plans, preventing the hotels from re-opening and providing a return to investors.

However, it is understood that Haskin's proposals for the renovations were to cost three times the original agreed-upon estimate of €32m and that Anglo was not prepared to commit further funds.

Anglo originally provided $100m in debt funding to acquire the hotels, while 59 high net worth Irish private clients put in just shy of $50m.

The bank and Haskin tried to break the impasse at a commercial mediation session in Dublin in June, but failed, prompting Anglo to issue proceedings to have the general partner removed to make way for complete bank control of Peninsula. Haskin's injunction objects to this course of action on the grounds that the original partnership agreement does not allow for removal on the grounds of disagreement.

In response to the injunction request, Anglo has filed an arbitration demand. The dispute is currently at a standstill and temperatures have cooled, according to Anglo.

This is the third multimillion New York real estate dispute Anglo has become involved in this year. In January Anglo's $393m mortgage for the Apthorp Building was thrown into jeopardy when one of the owners contested the terms of a loan restructuring after months of court battles with his business partner over control of the project. The bank has had to advance millions of dollars to cover unpaid property tax, operating costs and construction on the foreclosed Rector Square, a partially-occupied Battery Park development it financed for $165m in 2005 and foreclosed on in March.